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Incentives and the Sorting of Altruistic Agents into Street-Level Bureaucracies

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Author Info
Margaretha Buurman () (Dept. of Economics, Erasmus University Rotterdam)
Robert Dur () (Dept. of Economics, Erasmus University Rotterdam)

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Abstract

Many street-level bureaucrats (such as caseworkers) have the dual task of helping some clients, while sanctioning others. We develop a model of such a street-level bureaucracy and study the implications of its personnel policy on the self-selection and allocation decisions of agents who differ in altruism towards clients. When bureaucrats are paid flat wages, they do not sanction, and the most altruistic types sort into bureaucracy. Pay-for-performance induces some bureaucrats to sanction, but necessitates an increase in expected wage compensation, which can result in sorting from both the top and bottom of the altruism distribution. We also show how client composition affects sorting and why street-level bureaucrats often experience an overload of clients.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-113/1.

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Date of creation: 17 Nov 2008
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Handle: RePEc:dgr:uvatin:20080113

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: street-level bureaucracy; sorting; altruism; personnel policy; pay-for-performance;

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Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J4 - Labor and Demographic Economics - - Particular Labor Markets
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics

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